Ark. approves Entergy plan to join grid manager

Entergy wants its utilities to join the Midwest Independent Transmission System Operator, or MISO. The Carmel, Ind.-based group directs movement of electricity in parts of 11 Midwestern states and Canada's Manitoba province.

The approval by the Arkansas Public Service Commission could help the electric utility to win nods from remaining regulators. Texas regulators approved the shift Thursday and Louisiana approved it earlier. Entergy still needs blessings from Mississippi and New Orleans city officials.

Joining MISO is supposed to save Entergy customers across Arkansas, Louisiana, Mississippi and Texas $1.4 billion over 10 years. MISO says it will ensure Entergy customers get the cheapest possible power, even if that electricity comes from a plant in the upper Midwest. The move could also ease longstanding complaints that Entergy hasn't invested enough in its grid and has used its lines to favor its own power plants over independent generators.

"This is a big win for electricity consumers in Arkansas," Entergy Arkansas CEO Hugh McDonald said in a statement.

New Orleans-based Entergy wants to spin off its transmission lines to Michigan-based ITC Holdings Corp., but must join a regional transmission group before going ahead. Friday's action is another step toward that transaction, which must be approved separately by state regulators.

The Arkansas commission had demanded that regulators in each of MISO's member-states get a majority vote on where transmission lines are built and who will pay for them. Regulators have those rights over Entergy right now.

But the commission instead agreed to a MISO proposal to let two-thirds of state regulators in the Organization of MISO States (OMS) vote to impose a "yellow light" where MISO would reconsider a decision that states didn't like.

The Arkansas commission wrote in its Friday order that MISO did not "fully satisfy" its demands and it still wants a majority-vote structure. However, the commission said MISO had worked to provide state regulators with "enhanced authority and that Entergy could join after MISO filed documents showing governance changes had been officially adopted.

"The commission's expectation is that MISO and OMS will continue their efforts during the five-year transition period to develop and provide even greater governance enhancements," Arkansas regulators wrote. "The commission looks forward to becoming a member of OMS and participating in the ongoing governance dialogue."

The Southwest Power Pool, another regional transmission manager, had fought the MISO deal, asking the Arkansas commission to instead force Entergy Arkansas to join SPP. Nick Brown, SPP's CEO, said his Little Rock, Ark.-based group is still a better choice because it gives regulators the majority vote Arkansas sought. He also said the many connections between Entergy and SPP could be hard to manage.

"Regardless of our disappointment with this decision we will now turn our attention to ensuring a successful transition to MISO of our Entergy-related responsibilities, and will continue our work in building a robust transmission system and an efficient market for the stakeholders in the SPP region," Brown said in a statement.

Attention now turns to Mississippi and New Orleans regulators.

Mississippi regulatory staff and Entergy reached a Sept. 17 agreement that could spur Mississippi's Public Service Commission to approve MISO membership. MISO spokesman Andy Schonert said the group expects a hearing in early November.

Schonert said there's been a delay in New Orleans. There, an adviser to the City Council has warned that the ITC transfer could raise rates, but concerns about joining MISO are unclear.